Bitcoin’s weak hands fold

Strong capitulation and cheap accumulation have reduced the cap realized by short-term Bitcoin holders.

Bitcoin traded in a tight range around $64,500 as investors remained cautious following the Federal Reserve’s hawkish stance, while ongoing tensions between the United States and Iran kept risk sentiment in check.

Against this backdrop, a key on-chain metric BTC has fallen 62% over the past nine months.

Short-term holders are cracking

Crypto analyst Darkfost said that short-term Bitcoin (STH) holders continue to experience losses as cumulative losses become larger and larger. In his latest note, the analyst found that the realized capitalization of STHs has declined by almost 62% from its October 2025 peak.

According to Darkfost, the decline reflects typical behavior seen among short-term holders during market corrections. This includes extreme capitulation, which removes UTXOs created at much higher prices, as well as continued accumulation during the correction, which creates new UTXOs at lower prices. This process mechanically reduces the realized capitalization of the STH cohort.

The results also reveal that previous bear markets saw declines of 70-75% in this measure. Even though current levels approach this range, it remains uncertain whether the market will continue its consolidation or enter a final correction phase.

Earlier this week, Joao Wedson said Bitcoin could be approaching a historically significant accumulation zone based on on-chain data. The Alphractal founder noted that the ratio of the long-term holder’s realized cap to the short-term holder’s realized cap has climbed to 3.9, close to the level above 4 that previously coincided with major market lows.

This trend shows that realized capital is increasingly concentrated among long-term holders, essentially indicating stronger investor conviction and an advanced accumulation phase as short-term holders exit.

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The long-term outlook for BTC remains a matter of debate. Sykodelic, for its part, made one of the boldest predictions yet. In a recent market outlook, the crypto analyst argued that the current bear market is a mid-cycle correction. Comparing the 2011-2013 and 2019-2021 cycles, he predicts that Bitcoin could climb to between $380,000 and $450,000 starting in March 2028.

The forecast is primarily based on the 200-week simple moving average multiplied by five and a quantile-95 statistical band. However, not everyone was convinced and many skeptics took issue with both the projected timeline and the methodology behind it.

IBIT Boosts ETF Gains

On the institutional side, American spot Bitcoin ETFs returned to positive territory on Wednesday after four consecutive days of outflows. The funds recorded net inflows of more than $32 million. BlackRock’s IBIT led the way with $89.83 million.

Withdrawals from other ETFs, including Fidelity’s FBTC, which saw $43 million in outflows, and Ark 21Shares’ ARKB, which lost $14.6 million, limited overall gains.